jklcpa

Partnership agreements can be oral and are binding. Nothing says they must be in written form. Or do you mean that the partners had no agreement at all, written or oral?

I'm on 2 other forums and rarely post there. When I'm on the internet, I leave a tab open to this site and pop in periodically throughout the day when I need a break between returns or when I'm frustrated. It helps to know others have similar struggles and successes that I'm going through.

Also see the instructions for line 25 of Form 6252 that should help you. In a nutshell, you are reporting the entire recapture in the year of sale but the taxpayer hasn't received enough installment payments to cover that amount of gain. The first year of the sale, that $30K will be reported in full as ordinary income on the 4797. The $30K of cost and depreciation will be on the first year's 6252 on lines 8 & 9, and the recapture on line 12 and 13. Lines 16 & 18 will be 10K and 40K, respectively to allow the form to calc the 25% GP%. From there, the 10K payment received will be shown, work through the calcs on the form 6252 in part 2 through line 24. Line 25 will show $2500 because that is the total amount of gain realized on installment, but the taxpayer has recognized the more than that due to the recapture income. Each year's form 6252 will report an amount equal to the line 24 (the gain for the current year) until the total of all years' on that line equals the $30K of recapture income, and only then will a portion of the collections be taxed as a capital gain.

Your answer to #1 is "YES". Maybe this will help, from pub 537. Depreciation Recapture Income If you sell property for which you claimed or could have claimed a depreciation deduction, you must report any depreciation recapture income in the year of sale, whether or not an installment payment was received that year. Figure your depreciation recapture income (including the section 179 deduction and the section 179A deduction recapture) in Part III of Form 4797. Report the recapture income in Part II of Form 4797 as ordinary income in the year of sale. The recapture income is also included in Part I of Form 6252. However, the gain equal to the recapture income is reported in full in the year of the sale. Only the gain greater than the recapture income is reported on the installment method. For more information on depreciation recapture, see chapter 3 in Publication 544. The recapture income reported in the year of sale is included in your installment sale basis in determining your gross profit on the installment sale. Determining gross profit is discussed under General Rules , earlier.

"...the day on the calendar when a typical worker will have earned enough to meet their anticipated annual income tax obligations to federal, state and local governments." You all are funny. It's usually sometime in April. Rita, is that giant junk sale near you?! I'd die, or have nightmares about it.

Routine system maintenance is scheduled every Sunday from 1am to 7am, and sometimes it is extended for additional hours beyond that. https://www.irs.gov/Tax-Professionals/e-File-Providers-&-Partners/Modernized-e-File-MeF-Status-Page

Has any activity commenced or is a new business starting up? Has the 2553 already been filed?

I don't know much about it, I think it is a program through the SBA for woman-owed businesses in certain industries. I found only a couple of helpful pages at the SBA site that might lead you in the right direction: https://www.sba.gov/contracting/government-contracting-programs/women-owned-small-businesses/what-you-need-know-if-you-are-women-owned-small-business https://www.sba.gov/contracting/government-contracting-programs/women-owned-small-businesses Also, this organization has information but requires the user to set up a user name and password. It's the National Association of Women Business Owners. Be careful if passing along this organization's name to your client because my googling brought up a malicious site that sounded familiar in name. This link below is safe and goes to the real site that also has information on it. Again, I didn't see the info because I didn't set up user access: https://www.nawbo.org/resources/business/government-contracting and the organization's home page: https://www.nawbo.org/ Some of the things we are asked.... right?

I'm wondering if one of my older clients will get a letter like this also. He has a lot of income on his return but he also still has an S corp with a W-2 to himself that has been the same amount for years; same gross, same withholdings. He adjusts for the balance of his taxes by paying estimates. Same preparer too.

I agree. Put the royalty on Sch E so it's properly reported. It's one additional page in the return. No biggie.

RitaB, if there is one thing you must teach your young man, if you haven't already, is that we women NEVER forget anything.

It could be correct if the mom's income is low enough that she wouldn't be out of the 10% bracket, that cap gain would be taxed at 0.

From the 1040X instructions: Generally, for a credit or refund, you must file Form 1040X within 3 years (including extensions) after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later. If you filed your original return early (for example, March 1 for a calendar year return), your return is considered filed on the due date (generally April 15). However, if you had an extension to file (for example, until October 15) but you filed earlier and we received it July 1, your return is considered filed on July 1.

Agree with Michael. Nonauthoritative, but pub 946, page 47, see "Property Acquired in a Nontaxable Transfer".

In general, yes, but there are some exceptions. Bad debts and worthless securities have longer. Not sure if your Ponzi scheme amendment has some special rule. Check the instructions for 1040X. In general: File within 3 year (including extensions) of the date the original return was filed or within 2 years after the tax was paid, whichever is later. To determine the date filed - if no extension and the return was filed earlier than April 15, then use 3 years from April 15. If on extension until Oct 15 and filed earlier than Oct 15, then use 3 years from the date actually filed.

Too funny, laughing to tears! We all need to find more deduckshuns!!!

Rita, I had lots of returns that were 95% complete that have all been waiting for that last bit of information and was frustrated with the delays. They are finally getting done and yours will too.

$1,607. SE income of $60K * 92.35% * 2.9% = $1,607

I've actually completed a lot of work this week and it feels good. The last 2 weeks have been hell around here with one of my larger C corps in the midst trying to negotiate the sale of their business. It's been a lot of interruptions and I lost any motivation and momentum with my other work that has been piling up. Then this same client's attorneys started with the calls about the sale 2 days ago. I got on a roll with some partnerships and personals and now have only a handful that are in that haven't yet been worked on. Everything else is either waiting on signature forms or have been printed and are ready for pickup. Of course, there are still those that aren't yet in, and some new clients that I've agreed to accept at this late date that have yet to drop off. There's a wee pinpoint of light at the end of the long tunnel though! In other good news, I raised my prices this year by 10-15% and no one has complained. I've started giving a small discount to those that are using the drop box and mentioning it to those that chose not to. I hope that will encourage more people to use it in future. I should have done that years ago.

Thanks for those comments FDNY and Yardley. I read this topic and thought to myself that without the "Advantage", ATX would really be an incomplete product, but I didn't want to sound like I'm bashing the product since I'm no longer a user. If it were true that their standalone product wouldn't calculate an out-of-state credit, that would be enough for me to consider other vendors' software. Users seem to accept that ATX takes functions away and continue to pay higher prices each year for a lesser product, and then have to purchase additional modules (like when the payroll module was split off) to have the same capabilities as in the past year, the restructuring of fees for additional users, plus the talk of added processing fees such as for the 1099s. It all adds up in the overall cost of the product.

I like your plan. Although you didn't complete the returns, this person did benefit from your work and time expended by your noticing the incorrect codes and requesting the corrections.

I'm guilty of printing nonperf'd W-2s and prefer to receive those from my clients because they don't get stuck in the scanner as much. I also think you've earned the retainer, but if mom is putting up that much of a stink, you might consider giving it back for for your own peace of mind. I hate that this person thinks a CPA or anyone else will be able to wave a magic wand over those distribution forms with coding errors and have a correct return for daughter. Don't take her back if she doesn't like the outcome, or the bill, and comes back to you whining.

I went into the season already being tired, and now I'm staring blankly at the screen.

Debt must be secured by a qualified home, either the main home or second home, and it must have cooking, sleeping, and toilet facilities. I took a vaca on a house boat that was pretty nice and was technically a pontoon boat.

I decided to merge the two posts since each had replies. Please send nickels.